States Face Friday Deadline On Health Insurance Exchanges; Connecticut Has Submitted Outline Of Its Plan

WASHINGTON — — With the prospect of outright repeal all but gone, the nation's health care overhaul is proceeding, and states that once resisted the politically divisive law now must decide how to implement its most innovative aspect: the online health insurance shopping malls known as exchanges.

Beginning next year, the law requires states to establish Internet marketplaces in which individuals can compare and purchase private health insurance or, if eligible, enroll in public Medicaid coverage.

States that want to run their own exchanges without federal involvement have until Friday to notify the Department of Health and Human Services, but they get until Dec. 14 to provide the details.

"We expect that [the department] will be very flexible with states and try to give them as much leeway as possible, both to move forward with an exchange if they miss the deadlines and also to make any modifications after that deadline," said Caroline Pearson, the health reform director for Avalere Health, a Washington health care consulting firm. "So I do expect there'll be a fair amount of flux."

Jason Madrak, spokesman for the Connecticut Health Insurance Exchange, said the state is in good position. About a month ago, Connecticut officials submitted both the notification that the state would run its own insurance exchange and a plan that outlines how it would work. The plan is more than 700 pages, but Madrak said it's still just a "blueprint."

"There's still more work to do," he said. "There's an operational plan that we have to finish. There's still several policy issues that we're grappling with and will be decided on over the next few months." For instance, Madrak said, that the board of directors has to decide exactly what services will be provided.

The state legislature voted in favor of creating a health insurance exchange in June of last year.

"But the real work got started at the beginning of this year," he said. "That's when people rolled up their sleeves and started getting to work on putting the blueprints together."

Because there are so many questions about the plan, Madrak said, the board of directors is holding a series of "chats," open to the public, about the state's health insurance exchanges.

"We just want to offer an opportunity for consumers to get information," he said. There has been a lot of misinformation about the Affordable Care Act "and what it may or may not do," Madrak said.

The first of the seven informational sessions is Nov. 27 at the Hartford Public Library.

Small businesses also will use the exchanges to offer their employees a choice of coverage plans at group rates under the law's Small Business Health Options Program.

Federal tax credits tied to income will help many shoppers pay for coverage on the exchange. Also, competition among insurers and a groundswell of customers are expected to keep premiums in check when enrollment in the exchanges begins next October and coverage takes effect in January 2014.

The law requires all Americans to have health insurance in 2014 or pay a fine.

More than 9 million people are expected to get coverage through the exchanges in 2014, and 25 million in 2017, according to Avalere's projections.

Many states that opposed the health care overhaul didn't prepare for the exchanges, hoping that a Mitt Romney presidential victory and a Republican takeover of the Senate would deal the law a death blow. But President Barack Obama won and Democrats expanded their Senate majority, injecting it with new strength and forcing resistant states to fall in line.

On Tuesday, Florida Gov. Rick Scott, a Republican critic, said he now wanted to negotiate with the Obama administration, after previously blocking all advance work on an exchange for his state.

"The election is over and President Obama won," Scott told the Associated Press. "I'm responsible for the families of Florida. ... If I can get to 'yes,' I want to get to 'yes.'"

States can operate and administer their exchanges themselves or in partnership with Health and Human Services.

Although the numbers might change, at least 14 states and the District of Columbia will have state-run exchanges, according to Avalere. California was the first state to pass legislation creating an exchange. The others are Colorado, Connecticut, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon, Rhode Island, Vermont and Washington.

States that run their own exchanges have the authority to make operational decisions on how they'll be built, who builds them and what health plans will be featured. In partnership exchanges, states divide operational and management responsibilities with the federal government.

Not every state is moving aggressively.

At least 11 that opposed the health care law probably will end up with federal insurance exchanges run entirely by Washington. Among them are Kansas, Missouri, South Carolina, Texas and Alaska, the only state not to accept $1 million in federal seed money to study building its own exchange.

Brett Graham, the managing director at Leavitt Partners, which advises Republican-led states on the health care law, said control was "really critical when you start thinking about your individual [state] insurance market." Otherwise, the federal government regulates the local insurance market. "So you've ceded that to them," he said.